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Everyone is fully aware of the terrible property market conditions worldwide and the hope that the new year will bring about fresh optimism and recoveries in property sales.

Already the Bulgarian property market is showing signs of some relative stability and recovery, but massive profits and frequent sales will still be a slow process. It is worth mentioning however that Bulgaria and Eastern Europe is now out of recession !!

As a result of the improving economics astute investors are again looking at emerging countries for rock bottom investments and prime development/commercial ventures. Those that are fortunate enough to have freely available capital for purchasing will intially look for "Distressed Sales" & "BMV".

The UK property market relies on first time buyers to kick start property growth and sales; overseas property sales also needs a stimulas and the below buying situations will be the main motivators to bringing back capital growth rises like those seen during 2004 - 2007 in Bulgaria.

Distressed Sales - We have surely hit rock bottom as far as plunging prices is concerned?... and now we are in the situation where property owners badly affected by the credit crisis are trying anything and everything to shift their homes, apartments, land and businesses. In many cases owners are willing to sell at a loss to be able to repay credit cards, loans and the associated interest rates.

Desperate sellers have on average have dropped their property asking prices by over 50% !!. Property developers have slashed the price per m2 for new build (green field) offers and the average price is now at an all time low of €500 per m2.....this will continue for the first quarter at least in Bulgaria until the amount of buyers and sellers increases to more frequent levels.

Like first time buyers in the UK, the BG property market needs to see a constant turnover of distressed sales to improve the fortunes for those who are not in a desperate need to sell. We should see an end to distressed sales towards the last quarter of 2010 and see a move towards buyers seeking properties valued at BMV pricing levels..

BMV - Below market value - these property sales are happening now (albeit slowly) but will largely begin to shape the overall valutions of all properties towards the end of 2010. Owners who have property and are keen to sell (but not desperate) will be classed as BMV owners...it is these property sales that will allow analysts to predict the capital growth and general stability of the markets in the next 18 months. Once a regular turnover of BMV assets has occured will we have a much clearer picture of the recovery status.

BMV properties are valued on average 30% below the original purchase price and represents the value of properties as seen back in early to mid 2009, this of course is where we need to get back to...

Showcase Readers Said.....

Comment by Bill - January 13 2010 @ 02:58 pm

I see people are trying to talk up the Bulgarian property market by saying Bulgaria is out of the recession when even the Bulgarian government are saying they still have a downward slope with 250,000 expected redundancies in 2010, and project that property prices will slip another 10-12% in 2010

Comment by bogdan - January 13 2010 @ 09:52 pm

I agree with Bill's post concerning the Bg economy and property sales.. I see no light at the end of the tunnel, and neither do the UK people who are the major players on the Bg property market.. My properties won't sell at 2006 listing prices..

Comment by Mark - January 15 2010 @ 09:42 am

I can understand why the last two posters think everything is doom and gloom, but surely there is a light at the end of the tunnel ? I have had reports elsewhere and they dont say drop in prices this year but to gain slightly as far as property is concerened. Also GDP and inflation in BG is in a good state.....loses in employment is just an after effect from the slow down in the real estate sector particular new builds. The demand for new builds is less but this means resales will start to move in good time.....I think the market is turning a corner but think it will be toward the end of the year...lets keep our fingers crossed.

Comment by Bill - January 20 2010 @ 05:31 am

Mark I think your trying to talk the market up. I listen to radio Bulgaria every night, the latest figures (Mon 18th Jan) 1: it is expect that unemployment will reach 20% by May 2010. 2: Property prices are expected to fall by an average of 5.6% in 2010. While there is high unemployment and low house prices, Brits who would have brought in Bg are now staying put, many of those who have brought now find themselves unable to sell their property at anywhere near cost price. Just look at the amount of properties for sale there must be at least 50,000 houses alone, and as you were probably aware estate agents were giving a "buy one get one free" deal on new apartments in Golden sands and Sunny beach. I was in Bulgaria two months ago, and will be back there on the 25th Jan 2010. I have never seen so many half built apartments and houses as what I saw last time. An estate agent friend told me a lot of companies had gone out of business as a result of the down turn in property sales.

Comment by Mark - January 20 2010 @ 06:49 am

Hey Bill, No not trying to talk the market up just dont think things are totally doom and gloom. Whilst i also appreciate there are many offers available the fact is properties are moving. The properties are not moving at rates seen in the past but it is a start; things have to start somewhere again; which is why i said there is light and the end of the tunnel...... I agree large majority of buyers were English, Irish,Scots etc and this has had an affect but I know people that have sold apartments to our fellow brits and I know of other nationalities buying again in BG....so my opinion from what I see and hear is that there is movement. This is not talking up the market just sharing my experience....By the way I still have assetts that I would like to sell and sadly havent had masses of interest but good things will come again and i am currently considering an offer on one of them....so maybe I am just lucky to have interest ??

Comment by mark - January 20 2010 @ 06:50 am

Bill forgot to ask you who is offering "Buy-1-Get-1-FREE" offers on apartments ? If this is the case I might have a couple of those !! can you send me the developer website on here ?

Comment by Bill - January 21 2010 @ 12:22 pm

Hi Mark, unfortunately I do not have a web address for the "buy 1 get 1 free" companies. I was first approached by an agent in Golden sands, and viewed an apartment out of curiosity, that's when I got the first offer, when I was later in Sunny beach an agent was offering me an apartment, I mentioned the offer in Varna, and they said they would match it. I will do my best to track them down for you. Yes all is not doom, and there are properties selling, but at well below last years prices (not a bad thing as prices overheated) Like I said I will be in Yambol 25/01/10 and already I have been offered massive discounts on newly built houses price last year 85000 euro, last November 45000, this month 32000, by May should be around 25000 euro. I will be offering 22500 euro while I am out there, and I expect to get a bites. Land is a different matter, you can't give it away, but it's not going anywhere, so like money in a long term trust, but wont sell until building restarts.